Your Prenuptial Agreement is Junk! Part 2

Last week I wrote that your prenuptial agreement may be junk if it attempts to either predetermine child custody or leave your spouse completely broke.  However, even if you have a perfectly good prenup that makes adequate provision for your spouse, leaves the custody decisions up to the court, and makes a perfectly sensible division of property, you can still screw it up.

Another prenuptial agreement fail!

Tennessee law requires that a prenuptial agreement be entered into “knowledgeably” by the parties.  Our courts have held that this means the spouse looking to enforce the prenup must prove that he provided a “fair and complete” disclosure of his estate to his spouse.

What happens is the spouse with the wealth tends to have the greater negotiating power and influence in the relationship.   Sometimes the disadvantaged spouse finds themselves being pressured or manipulated into signing a document without really understanding what they’re giving up.

“After all, if you REALLY love me and you don’t care about the money, you shouldn’t have a problem signing this little paper, right?”

Cheap.  Manipulative.  Not worth marrying in the first place.  But people do it anyway.

Leveling the playing field

The disclosure is supposed to slow this nonsense down.  If you want your prenuptial agreement to be effective, your best bet would be to attach an accounting of your estate, written in plain language, to the agreement.

Even better, give your spouse the agreement, and advise her to have her own lawyer look it over.  While this “independent advice” is not a requirement to a valid prenuptial agreement, doing this goes a long way to prove your spouse had adequate knowledge of the effect of the agreement.

Without this, the spouse who wants to enforce the agreement can prove to the court the other party had independent knowledge of the size and nature of his estate.  This isn’t easy to do without something in writing as suggested above.  However, it does happen.  In this case, there was no disclosure along with the prenup, but in the wife’s testimony she accurately described the husband’s holdings.   The court decided that she had sufficient knowledge of the size of the estate she was giving up, and upheld the prenuptial agreement.

What you need to know

Again, don’t let me scare you away from a prenuptial agreement.  They’re perfectly valid when done correctly, but the agreement needs to be handled properly.  If you need a prenup or you’ve been presented with one by your fiance, contact me to find out how I can help.